There is a familar pattern in different financial markets. Many established financial instruments have followed, or are following, a lifecycle that involves the product’s initial emergence and rapid expansion leading to mass adoption, commoditisation and, inevitably, concentration among a handful of service providers (almost always big banks).
Institutional foreign exchange and equities have been through this cycle as have some fixed income products. The listed and over-the-counter derivatives markets are also going that way as evinced by the relatively few prime and inter-dealer brokers compared to 20 years ago.
Covered bonds also are not immune to this trend, if one compares the last three Januarys in the primary market. The proportion of overall business shared by the top 10 bookrunners increased last month, bucking the trend of the previous two years.
According to GlobalCapital’s Primary Market Monitor, the top 10 covered bond bookrunners in January 2026 arranged €17bn of benchmark paper in euros, which was just under 55% of the total priced last month.
This was up from €15bn, or 48%, in January 2025 and €21bn, or 50%, in January 2024, according to GlobalCapital’s Primary Market Monitor.
New entrants
Indeed, GlobalCapital’s Primary Market Monitor suggests the number of firms working as covered bond bookrunners has actually increased in recent years. There were 73 bookrunners on covered bond benchmarks last year compared to 68 in 2024 and 67 in 2023.
It ceratinly isn't because there are more mandates to win. Benchmark euro issuance was €181bn in 2023, €152bn in 2024 and €154bn last year. Total covered bond issuance is predicted by some to be similar this year to last.
It also is an unlikely explanation that this is because the market has reached some form of maturity and therefore commoditisation — it is already more than 250 years old.
Rather, the covered bond market has managed to retain and even increase its roster of bookrunners for two main reasons.
First, one of the points of covered bonds is to mitigate risk by diversifying issuers’ and investors’ exposure to third parties. The ability to reach a large and diverse pool of investors is crucial to issuers, and vice versa. And, in covered bonds at least, the secret to a diverse pool of investors is a diverse pool of bookrunners capable of fidning them all.
Broader reach
Tuesday’s Santander UK covered bond is a good example. The UK arm of the Spanish banking group picked as the joint lead managers for its euro dual-trancher: ABN Amro, Crédit Agricole, Danske Bank, LBBW, Lloyds, Santander and UniCredit.
So that’s a Dutch bank, a French bank, a Danish bank, a German bank, a UK bank, an Italian bank and itself.
The second reason is the convention of reciprocity.
In covered bonds, it is normal for banks to work on each other’s covered bonds. This arrangement ensures that every bank issuing covered bonds can expect to be appointed on at least a few mandates each year, supporting their syndicate’s commercial viability.
The tradition of reciprocity in covered bonds goes someway to ensuring that issuers continue to have a diverse and long list of bookrunners to choose from.
The covered bond segment may be quirky by modern standards but these quirks have ensured it remains a viable and competitive market long after its formation.